Is your brokereage prepared for a cyber attack?

Cyber fraud is a serious and growing threat, and the real estate industry is not immune. Cyber criminals use sophisticated techniques to hack into email accounts, impersonate parties involved in a transaction, and divert funds to their own accounts. The criminal schemes have become more sophisticated and are often very difficult to detect.

CURRENT SCHEMES

RECA has seen instances recently where this has happened in transactions involving our own licensees, with significant amounts of client funds being lost.

One current scheme is a diversion scam. This occurs when there is an accepted offer and the buyer is to e-transfer the deposit to the seller’s brokerage. Before the buyer executes the transfer, they receive email instructions that change the destination email address. The payment is diverted and the brokerage never receives the deposit. The banks are not obligated to reimburse the buyer or the brokerage. Deposits in transactions these days are often tens of thousands of dollars, and can take your client’s life savings. To do this, the fraudsters hack brokerage email addresses and can see when e-transfer instructions go out to clients.

As a best practice, brokerages should caution clients to question unexpected changes to payment instructions.

You have a professional obligation to protect your own and your clients’ confidential information and funds from cyber fraud.

CYBER SECURITY AND PREVENTION

RECA licensees should take proactive steps to enhance their cyber security awareness and skills. RECA’s Brokerage Cybersecurity Checklist is a good guide for evaluating your brokerage’s level of preparedness for a cyber security attack. It’s important to review it annually and ensure you have the proper procedures in place.

In addition, it is just as important to make your clients aware of your brokerage cyber security procedures and the ways that they can protect themselves personally. Proper protocols on typical contact procedures and the methods for legitimate fund transfers will help clients to be on the lookout for anything that seems out of place.

ERASE THE STIGMA – REPORT, REPORT, REPORT

At the end of the day, there is always the possibility of falling victim to fraud, even with the proper procedures in place. If it does happen to you or your clients, be sure to report the incident to the authorities and to RECA.

Reporting fraud is not only a duty but also a service to the industry and the public. By alerting the authorities and RECA, you help us to identify and stop the fraudsters, and prevent other innocent people from being scammed.

What are some things your brokerage is doing to decrease your cyber security risk?

Please share. Together we can keep our industry safe!